Hertz 2011 Annual Report Download - page 29

PART I
ITEM 1. BUSINESS
Our Company
We own what we believe is the largest worldwide airport general use car rental brand, operating from
approximately 8,500 locations in approximately 150 countries as of December 31, 2011. Our Hertz brand
name is one of the most recognized in the world, signifying leadership in quality rental services and
products. Hertz operates both corporate and licensee locations in cities and airports in North America,
Europe, Latin America, Australia, Asia and New Zealand. In addition, we have licensee locations in cities
and airports in Africa and the Middle East. We are one of the only car rental companies that has an
extensive network of company-operated rental locations both in the United States and in all major
European markets. We believe that we maintain the leading airport car rental brand market share, by
overall reported revenues, in the United States and at the 119 major airports in Europe where we have
company-operated locations and where data regarding car rental concessionaire activity is available.
We believe that we also maintain the second largest market share, by revenues, in the off-airport car
rental market in the United States. In our equipment rental business segment, we rent equipment
through approximately 315 branches in the United States, Canada, France, Spain, Italy, China and Saudi
Arabia, as well as through our international licensees. We and our predecessors have been in the car
rental business since 1918 and in the equipment rental business since 1965. We have a diversified
revenue base and a highly variable cost structure and are able to dynamically manage fleet capacity, the
most significant determinant of our costs. Our revenues have grown at a compound annual growth rate
of 5.2% over the last 20 years, with year-over-year growth in 17 of those 20 years.
Corporate History
Hertz Holdings was incorporated in Delaware in 2005 to serve as the top-level holding company for the
consolidated Hertz business. Hertz was incorporated in Delaware in 1967. Hertz is a successor to
corporations that have been engaged in the car and truck rental and leasing business since 1918 and
the equipment rental business since 1965. Ford Motor Company, or ‘‘Ford,’’ acquired an ownership
interest in Hertz in 1987. Prior to this, Hertz was a subsidiary of United Continental Holdings, Inc.
(formerly Allegis Corporation), which acquired Hertz’s outstanding capital stock from RCA Corporation
in 1985.
On December 21, 2005, investment funds associated with or designated by:
• Clayton, Dubilier & Rice, Inc., or ‘‘CD&R,’’
• The Carlyle Group, or ‘‘Carlyle,’’ and
• BAML Capital Partners, or ‘‘BAMLCP’’ (formerly known as Merrill Lynch Global Private Equity),
or collectively the ‘‘Sponsors,’’ acquired all of Hertz’s common stock from Ford Holdings LLC. We refer
to the acquisition of all of Hertz’s common stock by the Sponsors as the ‘‘Acquisition.’’
In January 2009, Bank of America Corporation, or ‘‘Bank of America,’’ acquired Merrill Lynch & Co., Inc.,
the parent company of BAMLCP. Accordingly, Bank of America is now an indirect beneficial owner of our
common stock held by BAMLCP and certain of its affiliates.
As a result of our initial public offering in November 2006 and subsequent offerings in June 2007, May
2009, June 2009 and March 2011, the Sponsors reduced their holdings to approximately 38% of the
outstanding shares of common stock of Hertz Holdings.
Our Markets
We are engaged principally in the global car rental industry and in the equipment rental industry.
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